Oil and Gasoline Prices Spike as War Disrupts Shipments

Why It Matters

Rising energy costs and supply uncertainty risk fueling inflation, straining energy-dependent economies in Asia and Europe, and reshaping global trade flows and geopolitical alignments as buyers pivot toward accessible suppliers like Russia.

Summary

Fighting in the Middle East has sharply disrupted oil and refined-product shipments, pushing tanker rates and crude prices higher as chokepoints like the Strait of Hormuz impede flows. While OPEC members signaled willingness to boost output quickly, physical disruptions and costly shipping limit the effectiveness of production increases. Markets are watching alternative suppliers such as Kazakhstan and expanded Russian exports to China and potentially India, while LNG outages in Qatar threaten gas-price spikes in Europe and Asia. Continued disruption for a week or more could trigger widespread supply shortages and further price volatility across crude, refined products, and natural gas.

Original Description

Ellen Wald, President of Transversal Consulting, talks about the impact of the Iran war on oil markets. Benchmark diesel futures rose by 23%, oil surged the most in four years, and European natural gas prices soared. Tanker traffic through the Strait of Hormuz has effectively stopped.

The publisher of the Middle East’s main oil benchmark said it won’t accept bids and offers for some grades inside Hormuz, underscoring exactly how the conflict is upending the pricing of grades that are key to some of the world’s biggest oil benchmarks.

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